Mark 404 – Internet

Marketing
Chapter 3: Marketing Strategy in Internet
Marketing

Presented by: Holly Chen &

Belinda Collins
 Contents
 The link between Business Unit Strategy &
Marketing strategy
 Marketing Strategy: A Basic Review
 Internet Marketing strategies – Pure play vs
Bricks-and-mortar
Business-level strategy vs Marketing
Strategy
 KEY CONCEPT: There must be a fit between
Business-level strategy & Marketing strategy
 …the business strategy directs the choices
made in the marketing strategy, so there must
be an ALIGNMENT between the two
strategies, e.g.
The four alignments required for a good
business & marketing strategy fit

Goal
Goal Alignment
Alignment

Implementation
Implementation Fit
Fit Resource
ResourceAlignment
Alignment
Alignment
Alignment

Activity
ActivityAlignment
Alignment

Mohammed, Fisher, Jaworski & Paddison,

(2004)
 Question time:
 1. What are the three key components of
marketing strategy?
 2. What are the 4 aspects that contribute to
positioning and target-market selection…hint,
they all start with P!
The 3 key components of traditional
marketing strategies
 Segmentation, Targeting & Positioning
Marketing Strategy Decisions

Product Promotion

Positionin
g and
Target-
Market
Selection

Price Distribution

Mohammed, Fisher, Jaworski & Paddison, (2004)

 Segmentation prioritization
 Firms prioritize segments based on selling
potential and/or market size. Firms must target
customers who are:
 Buyer-ready (ready to buy today)
 Receptive attitude (to the product)
 If a new product: target trend/market leaders first
 Target only those willing to pay for the
product/service
Example of segmentation at work…

Mohammed, Fisher, Jaworski & Paddison, (2004)

Segmentation example 2…

Mohammed, Fisher, Jaworski & Paddison, (2004)

Internet Marketing Strategies:
Pure Play
Pure Play
 The marketing strategies for
pure play companies are
Online
Online
Business-Unit
Business-Unit significantly different to
Strategy
Strategy
traditional firms because:
 Pure plays do not need to
integrate their online &
Marketing
Marketing
Strategy
offline strategies
Strategyfor
for
Online
Online  Their segmentation is more
Business
Business
complex because geographic
boundaries are broken, so
Choices there is more potential
1. Segmentation customers in more regions of
2. Target market selection
3. Positioning the world to be targeted

Mohammed, Fisher, Jaworski &

Paddison, (2004)
 Segmentation & target market
selection for Pure Plays
 Effective segmentation must be: Meaningful,
Actionable and Financially Attractive

 The most attractive target market is identified

by: Segment Size & Growth, Structural
Attractiveness (profitable entry?), and
company resources (alignment of company
capabilities & resources)
 Positioning for pure plays…
Positioning on features/service
Positioning on benefits
Positioning on specific usage occasions
Positioning on user category
 Very similar to
traditional marketing
strategy positioning
although must be
applied to the online
market

Positioning against another product

Product-class positioning
Mohammed, Fisher, Jaworski &
Paddison, (2004)
Five step positioning model for pure
plays:
Develop alternate Select and
strategies for Compare new
Identify actual Determine ideal implement the
achieving ideal actual position with
product positioning product position most promising
product position ideal position
alternative

Uses a Identifies the Generates Chooses plan Evaluates

perceptual most favorable alternatives for that is most outcome of

map to identify placement on either consistent with positioning
the variables the perceptual repositioning to the company’s efforts
that matter to map that the reach ideal objectives,
consumers product could state or the resources and
when they occupy introduction of strengths
make a new product
purchases

Mohammed, Fisher, Jaworski &

Paddison, (2004)
Bricks and Mortar
Companies
(BAM) Internet Strategies
 …Bricks-&-Mortar
Bricks-and-Mortar

Business-Unit
Business-Unit
Strategy
Strategy
 Overall
 Bricks-&-Mortar firms
Online
on the other hand, need

 Offline

to integrate their
Integrated
Integrated
Marketing
Business-Unit Strategy
Marketing
Strategy
Strategy with their internet
strategy to align their
Marketing
Marketing Marketing
Marketing offline capabilities with
Strategy
Strategyforfor Strategy
Strategyfor
for
Offline
Offline
Business
Business
Online
Online
Business
Business
their online potential

Choices
1. Same vs. different segment
2. Same vs. different target market Mohammed, Fisher, Jaworski &
3. Same vs. different positioning Paddison, (2004)
 Bricks-&-Mortar segmentation changes
due to internet introduction:
Change in Segmentation Characteristics  Segmentation will either
Due to Internet
result in:
 Reclassified expansion –
when segments change in
Yes
Market Expansion Reclassified — both size & characteristics
Expansion
 Market reclassification –
when customer segments
Changes in Size of are different on the
Market Segments internet
 Market Expansion –
characteristics are the
Market Reclassification
No No Change same for online & offline
segments
 No change

No Yes Mohammed, Fisher, Jaworski &

Paddison, (2004)
 Bricks-&-Mortar targeting
strategies online
 Segment characteristics stay the
Blanket Targeting same, but size may increase.
Online capabilities are a product
enhancement, appealing to all
targeted customers.
Beachhead Targeting  Online capabilities are a product
enhancement, appealing to only a
subset of customers.
 New capabilities online appeal to
Bleed-Over Targeting new online segments as well as
offline ones.

 New capabilities offer online

New Opportunity Targeting appeal to only online customers.

Mohammed, Fisher, Jaworski & Paddison,

(2004)
Framework to target segments…
Customer Similarity

Serve Same Same Customers Different Customers

Segment Serve New
Blanket Targeting New Opportunity
Online as Segment
Offline Online

Entire
Current
Segment Serve Part
of Offline
Segment as
Well as New
Serve a Beachhead Targeting Bleed-Over Targeting Segment
Portion of Online
Offline
Segment
Online

Portions of
a Segment
Mohammed, Fisher, Jaworski &
Paddison, (2004)
Positioning strategies continued…
Customer Similarity

Same Customers Different Customers

Blanket Targeting New Opportunity Targeting

 Borrow heavily from  Reposition entirely

existing offline positioning  Position differentiations
 Tout basic advantages of that cater to the new
Entire the Internet—convenience segment
Segment and accessibility

Focus of Effort
Beachhead Targeting Bleed-Over Targeting

 Also borrow from offline  Use dual positioning

positioning  Leverage existing
 Focus more, however, on positioning
Portions of needs of the smaller group  Position added benefits,
a Segment  Stress value-add of the such as augmented
Internet offerings via the Internet
(e.g., increased product
customizability)

Mohammed, Fisher, Jaworski &

Paddison, (2004)
 Summary
 Business-Unit Strategy must “fit” with Marketing Strategy to ensure that there is
alignment between goals, resources, activities and implementation of strategies.
 The three key components of traditional marketing strategies also apply to pure play
companies
 Internet marketing is more complex for Bricks-&-Mortar companies because they
must integrate their traditional strategies with their internet strategies
 Segmentation is more complex for Pure Play companies because geographic
boundaries are broken
 Segmentation for BAM companies may result in new segment characteristics and
sizes, as well as the ability to meet new customer’s needs from different locations